Editorial Simplified : 6th Day of April 2017
This Series of posts covers the essential Editorial from prominent newspapers. The Editorial from the newspapers are compiled by the Subject Teachers form the Academy and provided in notes format so that the aspirants does not waste their precious time in sifting through the newspapers.
Editorial : In largesse we trust – (The Hindu)
Editorial : A stopgap – (The Indian Express)
Farm-loan waivers announced by CM Yogi Adityanath
- In his first decision as the CM of Uttar Pradesh, Yogi Adityanath has approved farm loan waiver scheme, as promised by the BJP in its manifesto, and the same is set to cost the exchequer Rs 36,000 crore.
- In another story, the Madras High Court has asked the Tamil Nadu government to extend a similar farm-loan waiver scheme in the state and the TN government having spent Rs 5,780 crore for the farm-loan waivers will need to spend another Rs 2,000 crore.
- All this while our investments in agriculture remain abysmally low. U.P. invested just 2.3% of its total expenditure in agriculture in 2016-17.
- By this approach, the promise made by the PM of doubling farmer incomes by 2022 stands belied.
- Such steps could start a countrywide clamour of farmers asking for farm-loan waivers and political parties indulging their demands to reap political dividends.
- Such moves on the part of politicians hurt the credit discipline that banks want to inculcate in the borrowers, with the SBI chief having already warned against such schemes.
- Governments have shown little patience to make agriculture a sustainable activity. Linkages to formal market – credit, supply chain, investments are all dimensions where there is ample scope for improvement.
- Writing off loans creates moral hazard for borrowers, whereby they take loans more than they think they are capable of paying back in the hope that the government in later day would write them off.
- This could prod the banks away from loaning to farmers to Rural Infrastructure Development Funds, and then the framers would be left at the mercy of the money-lenders.
- All this is taking us back to the 20th century wherein we are not making use of the tools of the 21st century – satellite imagery, GPS devices, drones – to assess damage and settle claims but rather extending blanket waivers.
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